Guyana to earn US$960 million from 17-year Aurora gold mine

Guyana to earn US$960 million from 17-year Aurora gold mine

Wednesday, 01 October 2014 – Written by  Demerara Waves

Pres. and CEO of Guyana Goldfields, Scott Caldwell.

Guyana is expected to earn US$960 million in royalty and other taxes from the Aurora goldmine owned by the Canadian company during the first 17 years, Guyana Goldfields Inc; according to a senior company official.

Speaking at the re-launch of the Guyana Mining Toolkit, the President and Chief Executive Officer of Guyana Goldfields, Scott Caldwell said the mine is expected to produce US$150,000 ounces of gold per year beginning late 2015.   

A document titled Guyana Goldfields Inc  Aurora: A Mine in the Making gives a breakdown of the projected revenue for the country’s coffers.  The company is expected to pay an 8 percent mining royalty on gold sales at a price of over US$1,000 per ounce (5 percent if below US$1,000 per ounce). The royalty will yield US$341 million in revenue.

The company is expected to pay US$509 million in Corporate Tax calculated at 30 percent;  Payroll Taxes amounting to US$67 million and Excise Tax on petroleum totaling US$43 million.

The company intends to employ up to 900 staff and workers during the development and construction of the mine during 2013-2014 but that number is expected to decline to about 400 to 500 staff and workers during actual mining operations from 2015 and beyond.

With the initial capital investment amounting to US$250 million for 2013 to 2014, Caldwell said Guyana Goldfields would have to repay a loan.

The cost of production is estimated to be US$800 per ounce based on world price of US$1,300 per ounce. Guyana Goldfields hopes to extend the life of the mine from 17 to 35 years.

Caldwell described the gold operations at Aurora as “high grade, low cost” with a yield of just under three grammes per tonne. “Very, very clean deposit. We are blessed with some great metallurgy, very simple metallurgy so very, very low cost.It’s going to be one of the lower cost producers in the world when it comes to a gold mine,” he said.

A US$185 million loan has been acquired from a consortium of banks: International Finance Corporation (IFC), Export Development Canada, ING Capital LLC, Caterpillar Financial Services Corporation and The Bank of Nova Scotia.

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No cyanide spill at Guyana Goldfields’ Aurora mine- CEO

Wednesday, 01 October 2014 –  by  Denis Scott Chabrol – Demerara Waves

Photo: Construction underway for the Carbon In Leach tanks that will contain cyanide to process the ore.

Guyana Goldfields Inc. on Wednesday assured that there would be no cyanide spill from its Aurora Mine which is expected to begin production by September 2015.

President and Chief Executive Officer (CEO) of Guyana Goldfields Inc, Scott Caldwell also told a ceremony for the re-launch of the Guyana Mining Toolkit that should there be an emergency at the tailings pond the operations would be shut down.

“The cyanide is destroyed before we ever discharge into the dam or into the tails facility so there is no risk of a cyanide spill. Everything is double-lined and the plants are industry-standards today and things have changed a lot in the last twenty years on tailings dam construction as well as how you operate,” he said.

Caldwell said if one of the tailings processing facilities is down for maintenance or any other reason, “the entire plant is down.” “We can’t run it, we won’t run it. That’s by permit and that’s the way we will operate so there isn’t a cyanide risk at this plant,” he said.

The CEO further explained that the mine is 20 to 30 meters above river level and mining methods are not connected to the river. He said levees have been built in case of a flood.

Caldwell’s assurances came against the background of the spill of more than 325 million gallons of cyanide-tainted waste into the Essequibo River from the Omai Gold Mines.  The river and creeks- the only sources of water for washing, bathing and drinking by communities- had been polluted for days.  Many dead fishes had also floated up as a result of the biggest environmental disaster to have hit this country.

Guyana Goldfields Inc. has so far invested US$250 million in building the mine that has an original life of 17 years with good prospects of extension by another 18 years.

He said Guyanese would make up the bulk of the workforce in mining and maintenance, while a small number would be expatriates who would be operating sophisticated computerized systems for ore processing right through to the production of gold bars.

The Guyana Mining Toolkit is expected to be a guide for miners, residents and critics alike.

Minister of Natural Resources, Robert Persaud hoped that the toolkit would help to avoid and resolve conflicts especially between Amerindian residents and miners and authorities.